Did you ever get paid and within days wonder where the money went? Have credit card debt that you managed to pay as much as 50% off and then the next month you were back at square one? You get confused. You just don’t understand. What on God’s green globe is happening? Where is your money going? You don’t live an extraordinary lifestyle. You can’t even remember the last time you bought new underwear. So why does it seem as if your money is disappearing into thin air?
Chances are you are not tracking your money.
What is Tracking?
When you track your money, you record every cent that you spend and every cent that you get. I know…this sounds like work and as a family caregiver, you really don’t have the time for any extra tasks. Okay…but you are in a position where you have to rely on your credit card or on other people to get you to the next paycheck…so, maybe this means you have to make the time to get to the root of this problem so that you can solve it.
You need to know the exact amount that you are charging to your credit card and what this money is being spent on. For example, if you start tracking and realize that you spend US$400 on groceries and half of this is charged to your credit card, then this means you can only afford US$200 for groceries. To get more money for groceries, you can:
1) take the money from somewhere else, e.g., if you spend US$200 on personal grooming, then you could cut this amount by US$50 and put that on the groceries. This brings your grocery amount to US$250.
2) generate more income, e.g., overtime at work, and put that extra cash on the groceries.
The point is…if you do not track your money, you will not know your spending habits and therefore you will not know the areas of your life that are being financed, the areas being financed by debt, etc.
Why Family Caregivers Should Track
Family caregivers are spending money on themselves and their loved ones…it takes cash to care.
Family caregivers are spending their own income and possibly income from government programs.
Thus, organization is key here, or else you will find yourself under a mountain of debt and/or get your loved one disqualified from government benefits, if you do not follow the rules of the government programs (this can determine how much to spend and on what the money can be spent and how often, etc.).
What Tracking Tells You
The longer you track, the more data you will have. The more data you have, the more accurate your conclusions. But after just three months of tracking, you can easily identify:
- Unnecessary spending: like the bakery you stop at every Wednesday after work to buy one of your favorites because you’ve had a rough day.
- How your income compares to your expenses: do you spend more than you make? Thus, your job is literally not enough, and you have to seriously consider whether you are able to cut expenses to fit within your income or you will have to attain more income on a regular basis.
- How bad your debt really is: how many credit cards are you using and what’s the grand total for the debt? Car loans? Mortgage? Are you making a dent in your debt every month or is it just growing out of control?
How to Track
1. Good old pen/pencil and paper. Just get a little notebook, one that can literally fit in your back pocket, and note the following:
- how much you spent,
- what you bought,
- where you bought it,
- the date you bought it,
- if you had to use your credit card because you overspent that month.
2. An excel spreadsheet. If you are more technologically inclined, then you can create an excel sheet that will automatically calculate totals for you and even show you your net worth, etc.
3. There’s an App for that. As with most things nowadays, there are several finance tracking Apps. Do some research to see which one is best for your needs and jump right in. If finance Apps seem overwhelming, you can use any note taking App already on your phone.
Recommended software for tracking your money: Quicken or Moneyspire
N.B. If you mostly make payments electronically, then your tracking will be easier as the information will be captured by your bank, and you just need to access your online banking.
Know Where You Are Financially
When you actually know where you are financially, then you can actually plan to move from where you are to where you want to be. Financial stress is one of the leading causes of depression and anxiety for family caregivers, as many of us did not have a true understanding of what caregiving would mean until we were already up to our necks in it.
The good news: it is never too late to start. Begin to take control of your finances today. With each step you take, the closer you get to being financially stress-free!